Bitcoin’s price surged following the release of new US job data, which pointed to a slowing labor market and fueled expectations of a potential Federal Reserve rate cut. The Labor Department reported that nonfarm payrolls increased by 143,000 in January, a significant drop from the 256,000 recorded in December. This figure also came in below Wall Street’s forecast of 169,000.
In addition, the unemployment rate dropped from 4.1% to 4%, signaling a decrease in the number of unemployed individuals. These indicators suggest that the labor market is cooling, increasing the likelihood that the Federal Reserve may ease interest rates. Lower rates generally make risk assets like Bitcoin more attractive to investors.
Following the data release, Bitcoin saw a notable price jump, reaching $98,497, up from a 24-hour low of $95,707.35. However, it has since retreated slightly and is currently trading at $97,949.
Along with the price movement, Bitcoin Futures Open Interest also spiked, indicating rising investor interest. Some analysts are optimistic that these trends could signal a bullish outlook for the cryptocurrency market.
The broader financial markets reacted to the job data as well, with the 10-year U.S. Treasury bond yield climbing 0.77% to 4.471 and the U.S. Dollar Index rising 0.23% to $107.790. However, according to the CME FedWatch Tool, there is only a 10.5% chance of a 25 basis point rate cut at the Federal Open Market Committee (FOMC) meeting in March.
Federal Reserve Chairman Jerome Powell recently stated that the central bank would monitor inflation and economic conditions before considering any policy changes. In his remarks on January 30, Powell emphasized that the Fed needed more evidence that inflation was on track to meet the 2% target before making any decisions on rate cuts.
Despite skepticism about an imminent rate cut, some crypto analysts remain bullish on Bitcoin’s prospects. Market analyst Mister Crypto tweeted that the latest job data was “BULLISH FOR CRYPTO,” suggesting that a softer labor market could enhance Bitcoin’s appeal as an investment.
However, the crypto market could still experience short-term volatility. Large Bitcoin (BTC) and Ethereum (ETH) options contracts are set to expire soon, which could lead to price fluctuations.
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